2026 Review of Low-Income Countries Debt Sustainability Framework

The Debt Sustainability Framework for Low-Income Countries (LIC-DSF) is a joint analytical framework developed jointly by the International Monetary Fund (IMF) and the World Bank. It is used to analyze public debt stress and sustainability in countries eligible for concessional financing from either institution. Since its introduction in 2005, the LIC-DSF has been the cornerstone of the international community’s assessment of risks to debt sustainability in LICs, with important operational implications for stakeholders. Its primary objectives are to support the IMF and WB policy advice and lending decisions and help guide fiscal policies and public debt management in low-income countries, balancing the need to finance growth and development with keeping debt vulnerabilities in check.

Since the last reform of the LIC-DSF in 2017, the debt landscape has become more risky and complex for LICs at a time of elevated development needs, falling official development assistance and rising borrowing costs. Borrowing patterns have also become more heterogeneous across the country grouping, with frontier and other relatively wealthier LICs making greater use of borrowing on commercial terms.

The 2026 LIC-DSF Review aims at future-proofing the framework to ensure that it remains fit for purpose as debt risks, financing patterns, and analytical tools continue to evolve.